Tuning in to Apple TV 3.0

September 8, 2008, 1:52 PM UTC

Does Steve Jobs have a surprise in store for the analysts and reporters gathering in San Francisco for Let’s Rock — the dog-and-pony show Tuesday at which Apple (AAPL) is widely expected to unveil the next generation of iPods?

Peter S. Magnusson hopes he does — and what he’s wishing for is a new Apple TV.

The Swedish-born entrepreneur (and founder of Virtutech) points out in a thoughtful post that the upcoming holiday buying season is a perfect opportunity for Apple to overhaul the set-top box that even Jobs admits has been less than a runaway hit — and Tuesday would be a perfect opportunity to unveil the new device.

Why now?

Because on Feb. 17, 2009, by Congressional mandate, all full-power analog TV broadcasts in the United States will cease. That means that not long after Christmas, tens of millions of American TVs will go dark unless they are connected to cable, satellite or an analog-to-digital converter box.

The U.S. government is offering every household two $40 credit card-type coupons to pay for these boxes and has set aside enough money to fund more than 22 million of them — with an option to increase that number to more than 33 million.* See here.

This is expected to create a huge market for converter boxes, most of which will do no more than bring that dead TV back to life and offer a new remote to replace the one that no longer works.

But it could also create a huge opportunity for Apple TV to stage a fresh assault on the living room — especially if Apple throws in a few more goodies that Magnusson spelled out in a wish list posted on Sunday:

  • Blu-ray disc player; of course one that can also play DVDs and CDs.
  • ATSC tuner. That’s a fancy way of saying over-the-air digital TV.
  • 500G hard drive (1T optional).
  • WiFi.
  • DVR capability added to iTunes 8.0.
  • Time Capsule functionality, in other words, Time Machine backup.
  • Full Safari browser and support for (optional) keyboard.
  • Various new and improved options for Internet video.
  • Support for using the iPhone or the iPod touch as smart remotes. (link)

Magnusson wouldn’t mind if the new box played games, but that’s not a deal breaker. He also suggests that it would be nice if Apple’s re-fashioned set-top box were seemlessly integrated with the iPhone, which would enable what he calls the “coolest thing of all”:

“If I’m watching a movie with the sound turned way up, it would gently pause when my cell phone rings.” (link)

Now that’s a feature I can imagine Steve Jobs showing off on stage on Tuesday — and having a lot of fun doing it.

The timing is certainly right. The DTV era began at noon on Monday in Wilmington, NC, when all the major networks except the local PBS afiliate turned off their analog broadcasts in a trial run before the nationwide shutoff.

The original Apple TV was announced two years ago and started shipping in March 2007. The device got a major overhaul in January 2008 with the release of a software update that Apple dubbed “Take 2.”

*UPDATE: Reader Jaime in Denver points out that that in all likelyhood, the $40 credit could not be applied to Apple TV for a variety of reasons, including the interfaces it supports. See Rule d. 54. here.